Crowdfunding or Tribefunding? That is the question.
Now crowdfunding per se assumes that a new venture is funded by small contributions from a usually large crowd, through the aid of the Internet. Entrepreneurs can thus cast a wider net in terms of their marketing reach, all while testing their ideas in real time manner, to name a few advantages.
But what if we consider Seth Godin's distinction between crowds and tribes?
According to him, "a crowd is a tribe without a leader", for which a tribe represents "a group of people connected to one another, connected to a leader and connected to an idea". He goes even further as to state that the majority of organizations are marketing to the crowd, while smart organizations are rather gathering a tribe around their brands.
Does this also apply to crowdfunding? It definitely does.
Building an online-community is probably the most vital pre-launch step in designing a successful crowdfunding campaign, since loyal communities provide the necessary traffic for its initial funding momentum, which in return increases the success rate of a campaign by 90%.
However, this is not work to be done in one day or one week. Online communities are rather built on a prolonged time - usually 3 to 4 months prior launch - in which the creator (entrepreneur/campaign figure/organization) offers value to his or her audience in the form of posts, newsletters, gifts, offers, etc., through different communication channels such as Social Media, blogs, forums, podcasts, etc.
Judging by Godin's definition, the campaign creator in this case is in fact the so-called tribe leader, which has to engage with his audience at a deeper, more personal level, if he desires to leverage this relationship at a latter stage, i.e. to ask for funds.
The key here is to develop outstanding expertise and exude great trust regards the domain in which the future product or service is going to be rooted, all while creating a story around it that will last way much longer than the campaign's official period.
Novelty and awesomeness are prerequisites for this strategy, as backers need to be energized towards a goal that transcends crowdfunding's main purpose, i.e. getting cheap-capital. They need to feel that they are part of something bigger than themselves, that they do make a difference, or at least help somebody put a dent into the universe.
Look at Pebble's first crowdfunding campaign in 2011. Migicovsky, Pebble's CEO and tribe leader, has gathered an enthusiastic tribe around his project by actively selling them on the idea that they aren't in fact funding another average gizmo, but rather supporting the creation of the first smart-watch ever to be launched on Earth. How's that for a mission? No wonder the project has exceeded its $100k target in the first 2 hours of its launch. The CEO and his team have also engaged with their audience at a one-on-one level, by responding within a couple of hours to their backers' inquires, creating a dedicated Pebble forum for future product specs, and even grabbing beers with their customers, in order to see how the product actually interacts in their everyday lives.
The key thing to remember is that campaign creators need to act more as tribe leaders responsible of creating a novel movement that should last longer than their campaigns' length, ultimately metamorphosing into what is truly a tribe, as opposed to a temporary push that is only meant to fund their creative endeavor.
I conclude the post by coming back to our initial question? Crowdfunding or Tribefunding? Perhaps tribefunding in the case of a successful campaign that delivers on its promises, creating as a result a culture around it, and crowdfunding for anything that falls in the other category? The choice is yours.
Crook, J. (2013, April 13). How The Pebble Smart Watch Hit $2 Million On Kickstarter [Q&A].
Godin, S. (2008). Tribes. We Need You to Lead Us. Piatkus: New York.
Seeders. (n.d.). In crowdfunding, momentum is king.